The chamber of commerce in Marshall Islands says about eight- to nine thousand farmers on outer islands will be affected by plans to slash the price of dried coconut meat.
The government's copra plant has announced it'll reduce the price of copra paid to farmers by about thirty percent from November 1st, after world coconut oil prices slumped.
The chamber's secretary, Jim McLean, says the announcement will have a small economic impact on the country as a whole, as it produces and exports only a small amount of coconut oil.
But Mr McLean says it'll have a significant social effect in the outer islands.
"The primary impact will be on the subsistence populations that live on the outer islands. It's in the area of 8000 to 9000 people. For many of them it represents their only source of income. This income will be used to buy things that they can't produce for themselves."
Jim McLean says the government has always subsidised the farmers, and will continue to do so.